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Brown & Brown, Inc.’s BRO subsidiary Bridge Specialty Group, LLC has acquired substantially all assets of Leon Silver Associates, LLC (Leon Silver).
Bridge Specialty, launched in February 2021 by Brown & Brown, is a team of companies focused on bringing the power of collective size and specialty to the wholesale brokerage marketplace. Bridge Specialty represents more than 180 excess and surplus line carriers that support more than $3 billion of premium volume book.
Leon Silver is a wholesale brokerage intermediary established in 1971. It furnishes commercial and personal line property and casualty insurance products through its network of retail agents in New York, New Jersey, Pennsylvania, Florida, Connecticut and Delaware.
With the acquisition, Brown & Brown and its subsidiary will leverage the expertise of Leon Silver in offering high-quality products and services. The acquisition is expected to enhance the acquirer’s insurance services and cater to the retail agents with better services.
With the buyout, Leon Silver will be able to furnish its retail agent partners with better product offerings as well as provide career opportunities for its employees.
Notably, the latest transaction marks the first buyout of the insurance broker in second-quarter 2021. In 2020, it closed 23 transactions.
Inorganic Growth Story
Brown & Brown along with its subsidiaries pursues frequent buyouts in order to achieve top-line growth. Its revenues have got a boost as a result of a persistent focus on net new business growth and acquisitions.
Consistent investments and solid earnings will likely aid this Zacks Rank #2 (Buy) insurance broker in carrying out inorganic efforts. Acquisitions drive Brown & Brown’s commission and fees, which, in turn, boost revenue growth.
From 1993 through first-quarter 2021, the company acquired 561 insurance intermediary operations. It remains well-positioned with its capital structure and has been able to access sufficient capital via $1.1-billion available cash to fund growth. Moreover, consistent operational results have helped Brown & Brown to generate solid cash flows to be deployed in strategic initiatives. So far this year, it has made four acquisitions.
The stock has risen 28.5% in the past year compared with the industry’s growth of 28.1%. The company’s efforts to ramp up growth and capital position should continue to drive its shares.
Other Acquisitions in the Same Space
The last few months witnessed rigorous mergers and acquisitions in the insurance brokerage space, mainly attributable to the abundant capital availability.
Assurant AIZ acquired TRYGLE Co. Ltd. to maximize the daily use of mobile devices, electronics and home appliances. Marsh & McLennan Companies, Inc.’s MMC unit Marsh & McLennan Agency LLC recently acquired PayneWest Insurance, one of the largest independent agencies in the United States.
In the second quarter of 2021, Arthur J. Gallagher & Co. AJG purchased Oslo, Norway-based Parisco AS to enhance its capabilities across marine, energy and renewables sectors.
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